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I-T department seizes Rs 5 crore cash while unearthing network of safe-keeping services

The income tax department has seized Rs 5 crore cash while unearthing a nationwide network of private entities providing safe-keeping services.

, ET Bureau|
Last Updated: Nov 19, 2012, 04.57 AM IST
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MUMBAI: The income tax department has seized Rs 5 crore cash while unearthing a nationwide network of private entities providing safe-keeping services, a service similar to the locker services provided by banks to its customers.

Income tax officials, who carried out a raid last week at certain premises at the Opera House, where such safety vaults are kept, concluded that these private safe-keeping services are closely linked to a nationwide network of hawala operators.

They have sealed 45 such vaults and lockers, out of this 25 lockers are yet to be opened. "Running a private safe keeping service is legal. But the kind of clientele that avail such services require to be probed," an official said. According to I-T officials, such services are availed mostly by those who are not in a position to access banking channels because of the strict Know Your Client (KYC) norms.

A senior income tax official said: "Those who have kept small amounts in the lockers have already volunteered to disclose the contents in their vaults. But those who have kept large amounts are shying away from appearing before the officials. We will open these lockers soon, irrespective of whether they appear before us or not".

I-T officials insisted that the private networks providing safe-keeping services are part of large hawala networks. For example, if an entity in New Delhi wants to transfer cash to his counterpart in Mumbai through off-bank channels, his job is as simple as contacting an operator in Delhi and handing over the cash and the address in Mumbai to which money has to be sent.

The operator in turn communicates immediately to his counterpart in Mumbai who will retrieve the cash from a vault which is closer to the address given to him before handing over the cash to the addressee. The private safe-keeping network charges a commission for the service, about 3,000 per vault annually.

An I-T official said they gathered the intelligence by sending a senior I-T official posing as a client who wanted to avail the safe-keeping service.

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